OREANDA-NEWS. Fitch Ratings has assigned 'AAA/F1' and 'AAA/F1+' ratings to The City of New York's (City) general obligation bonds, fiscal 2015 series F, adjustable rate bonds, \$100,000,000 subseries F-4, and \$50,000,000 subseries F-7, respectively. The Rating Outlook for both series is Stable.

KEY RATING DRIVERS

The long-term rating is determined using Fitch's dual-party pay criteria and is based jointly on the underlying rating assigned to those bonds by Fitch (currently rated 'AA'/ Stable Outlook), and the support provided by the irrevocable letter of credit (LOCs) provided by Bank of Tokyo-Mitsubishi UFJ, LTD (rated 'A/F1'/Stable Outlook) for F-4 and Royal Bank of Canada (rated 'AA/F1+'/Stable Outlook) for F-7. The short-term 'F1' and 'F1+' ratings are based solely on the LOCs. For information about the underlying credit rating see press release dated May 28, 2015 available at 'www.fitchratings.com'.

Fitch's dual-party pay criteria consider the likelihood of the failure of both a rated obligor and a bank LOC provider. The methodology results in a long-term rating that is up to two notches higher than the stronger of the two credits if the following conditions are met: (1) both entities have a rating of 'A' or higher; (2) the transaction is structured such that payments from both the municipal issuer and the bank are in the flow of funds and both entities would have to fail to perform before the bonds defaulted; and (3) the credit of the bank and the rated obligor have no more than a medium degree of correlation. Fitch has determined a low degree of correlation between banks and the City which results in a long-term rating of 'AAA' for the bonds. If either the underlying bond rating or the bank rating were downgraded to 'A-' or lower, the dual-party pay criteria could no longer be applied, and the long-term rating assigned to the bonds would then be adjusted to the higher of the bank rating and the underlying bond rating.

Pursuant to the LOCs, the banks are obligated to make payments of purchase price for tendered bonds, including bonds that are required to be tendered upon any failure of the City to provide funds to Bank of New York Mellon, as fiscal agent, for the payment of principal and interest on the bonds on a payment date. The ratings will expire upon the earliest of: (a) June 15, 2018 for subseries F-4 and June 18, 2018 for subseries F-7, the initial stated expiration date of the LOCs, unless such date is extended; (b) conversion of the interest rate on the F-4 bonds from the weekly rate mode and conversion of the F-7 bonds to a mode other than a daily, two-day or weekly rate mode; (c) any prior termination of the related subseries LOC; and (d) defeasance of the bonds. The LOCs provide full and sufficient coverage of principal plus an amount equal to 35 days of interest at a maximum rate of 9% based on a year of 365 days and purchase price for tendered bonds. The remarketing agents for the bonds are Morgan Stanley for F-4, and RBC Capital Markets, LLC for F-7. The bonds are expected to be delivered on or about June 18, 2015

The subseries F-4 bonds initially bear interest at a weekly rate, and subseries F-7 bonds initially bear interest at the daily rate. Each subseries may be converted to a daily, two-day, commercial paper, stepped coupon, auction, term or fixed rate. While bonds bear interest in the weekly rate mode, interest payments are on the first business day of each month, commencing July 1, 2015. Funds drawn under the LOCs are held uninvested and are free from any lien prior to that of the bondholders.

Holders may tender their bonds on any business day, provided the tender agent and remarketing agent are given the requisite prior notice of the purchase. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate; (2) upon expiration or termination of the respective LOC; (3) upon substitution of the respective LOC if such substitution results in a reduction or withdrawal of the rating assigned to the bonds; (4) following the receipt of written notice from the bank of an event of default under the respective LOC directing such mandatory tender; and (5) upon failure by the City to timely provide funds to the Fiscal Agent at maturity or on a redemption date or interest payment date. Optional and mandatory redemption provisions also apply to the bonds. There are no provisions for the issuance of additional bonds.

Bond proceeds will be used to finance capital projects for the City.

RATING SENSITIVITIES

As described above, the long-term rating is tied to the long-term rating assigned to the bonds and the long-term rating that Fitch maintains on the bank providing the LOC. Changes to one or both of these ratings may affect the long-term rating assigned to the bonds.

The short-term ratings are exclusively tied to the short-term rating that Fitch maintains on the bank providing the LOC; and will reflect all changes to the rating.